Anthony W. Imbimbo, CPA, APC

08/11/2021

Sometimes it can get a little tricky allocating prepaid revenue over time. Companies that offer SaaS (Software as a Service) often run into this sort of issue.

Here I lay out how to record the prepaid revenue in QuickBooks Online and then have QuickBooks automatically allocate that revenue over the months of service.

Entering prepaid revenue (subscription revenue) and automating the allocation of prepaid revenue over time using QuickBooks Online.

08/06/2021

Sometimes being a CPA is more than crunching numbers.

Testing the hardware (touchscreen terminal, barcode scanner, receipt printer, and credit card machine) for a new Point of Sale (POS) system that's now ready for installation at the client.

5 systems at 5 locations. All cloud based (except for the app running on the touchscreen terminal) and it interfaces with QuickBooks Online.

The client can see how each location is doing without leaving home. And we can login at any time to do our number crunching!

01/07/2021

For the second year in a row, the Federal Mileage Rate has decreased. The rate is now set at 56 cents per mile for 2021... Down from 57.5 cents in 2020. Learn more about using the Federal Mileage Rate and the rates for charity and medical miles.

https://www.awicpa.com/federal-mileage-rate/

12/22/2020

Do you have a Single Member LLC?

If so, you could potentially realize significant tax savings by electing to have your LLC treated as an S-Corp for income tax purposes.

Before you make the change, click on the link below to find out what is involved.

https://www.awicpa.com/converting-from-a-single-member-llc-to-an-scorp/

12/17/2020

Choosing a CPA or Accountant can be a difficult and time consuming process.

Learn tips and strategies for hiring a new CPA or to keep the lines of communication open with your current CPA. The key is having a clear set of requirements and expectations for both you and your CPA.
https://www.awicpa.com/how-to-choose-a-cpa-or-accountant/

10/14/2020

The automatic 6-month extension for individual filing of income tax returns expires tomorrow...

So not much time is left to file your 2019 taxes!

If your concerned about the Obamacare Premium Tax Credit, then here are a few things you may want to consider http://www.awicpa.com/obamacare-premium-tax-credit-filing-your-tax-return/

01/27/2016

Here is an interesting article from the IRS regarding filing your taxes timely. It came to the forefront of my mind after meeting with several clients who unfortunately, filed their taxes late. It is not uncommon for penalties and interest on late filing to be 40-80% of the total tax liability (of course this depends on how late you file).

Eight Facts on Late Filing and Late Payment Penalties

April 15 (for 2015 taxes, it's April 18, 2016) is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline.

Here are eight important points about penalties for filing or paying late.

1. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline.

2. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should explore other payment options such as getting a loan or making an installment agreement to make payments. The IRS will work with you.

3. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25 percent of your unpaid taxes.

4. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.

5. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.

6. If both the 5 percent failure-to-file penalty and the ½ percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent.

7. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

8. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time.

(Taken from IRS Tax Tip 2013-58, April 18, 2013)

Call me and I will prepare your taxes timely and efficiently. 619-497-1040

01/26/2016

1099MISC = Schedule C

So, you did some work on the side for someone last year. Or, you had a temporary job. Now you're ready to file your taxes and you get your earnings document in the mail and it's not a W-2 but a 1099MISC.

You ask yourself: What does this mean? Where do I put this on my tax return?

Well, the answer is your tax return just got complicated. This temporary job that you thought would be a quick way to make some extra money ends up costing you money!

A 1099MISC is an earnings statement for independent contractors not employees. In general, you must report this income on Schedule C of your tax return. In addition, if you have earnings in excess of $400, you'll have to pay Self Employment Tax (SE Tax). This tax translates to approximately 15%. And it's assessed OVER AND ABOVE INCOME TAX!

What's the fix? You'll need to keep good records of your business income and your expenses. Your business expenses can offset your 1099MISC income and thereby defray SE Tax and Income Tax.

If you need help, don't go it alone. Call me and I will prepare your taxes expertly for a fair price. 619-497-1040

01/25/2016

Unreimbursed Employee Expenses and the Standard Deduction
If you work as employee, you may have various job-related expenses that you ultimately payed out of your own pocket and never received reimbursement from your employer. If you drive for Uber or Lyft, this is especially true – you’re paying for your own car insurance, repairs, gas, car washes, etc.!

But did you know you can deduct these unreimbursed job expenses from your income on your tax return? The IRS allows you to itemize your deduction or take a standard deduction (whichever is greater). The standard deduction in 2015 for a single person is $6,300.00 and $12,600 for married taxpayers. Those itemized deductions include medical expenses, taxes paid, mortgage interest, charitable contributions and unreimbursed employee business expenses.

The IRS allows you to deduct unreimbursed job expenses that exceed 2% of your adjusted gross income. You may be eligible to itemize if your deduction exceed the standard deduction.

Here’s an example to help illustrate:

Jon, an Uber driver, received a W-2 for $22,000 (and his adjusted gross income is the same at $22,000.00) and he spent a total of $5,000.00 out of pocket in 2015 to pay for car insurance, repairs and gas. By the IRS limitation, Jon can only deduct the part of the expense that exceeds 2% of $22,000.00 ($22,000 x 2%=$440.00).

Jon now can deduct $4560.00 ($5000 expenses - $440 of the 2% threshold on $22,000) deduction as an itemized deduction.

This is just a simplified snippet of how to handle unreimbursed job expenses. If you want to know more, call Anthony Imbimbo today at (619)497-1040 to get help filing your taxes!

01/14/2016

How to Save Over $1,000 on Your 2015 Tax Bill

It's not too late to reduce your 2015 tax bill. Retirement savers continue to have a powerful option to decrease the amount they owe in federal income tax, if they are willing to deposit money in an individual retirement account. Depending on your tax rate, a last-minute IRA contribution could save you hundreds or even over $1,000.

The higher your tax bracket the more you save. You can defer paying income tax on up to $5,500 that you contribute to an IRA. "That $5,500 deduction is going to either lower your tax bill or bump up the refund you are owed," says Trent Porter, a certified financial planner for Priority Financial Partners in Denver. "A lot of tax programs can give you that hypothetical of how much more your refund will be if you contribute X amount of dollars to an IRA." Maxing out your IRA will reduce your tax bill by $825 if you are in the 15 percent tax bracket, $1,375 for those in the 25 percent bracket and $1,815 if you pay a 33 percent tax rate. Income tax won't be due on this money until you withdraw it from the account.

Workers over 50 can get an even bigger tax break. People who are age 50 or older can contribute an extra $1,000 to an IRA, which will get them a larger tax deduction. If a 55-year-old worker who is in the 25 percent tax bracket contributes $6,500 to an IRA, he will reduce his tax bill by $1,625.

Double your tax break with a spousal IRA. Married couples can double their tax break by each opening an IRA in their own name. If only one spouse works and you file a joint tax return, the working spouse can contribute to an IRA in each spouse's name. A married couple can claim a tax deduction on as much as $11,000 that they contribute to two or more IRAs. And if both spouses are 50 or older, the contribution limit climbs to $13,000. A married couple, both age 50, who are in the 25 percent tax bracket and max out an IRA in each of their names will save $3,250 on their income tax bill.

Contribution deadlines. IRA contributions that will qualify you for a deduction on your 2015 return are due by April 18, 2016. "IRA contributions can be made up until 11:59 p.m. on the tax deadline, assuming they are received in good order," says John Boroff, director of retirement product management at Fidelity Investments.

You can file a tax return claiming an IRA deduction before the money is in the IRA account as long as you make the deposit by your tax filing deadline. "You could file your taxes on March 1 and tell the IRS you will make the contribution by April 15," Porter says. "You can get your refund and use that to go toward what you are going to be putting in the IRA." You can even deposit your tax refund directly into an IRA. When making a tax-year 2015 contribution during 2016, it's important to specify which tax year you would like the contribution to be applied to. IRA custodians are allowed to attribute contributions to the calendar year in which they are received unless you indicate otherwise.

Claim the saver's credit. In addition to the tax deduction on your IRA contribution, workers who earned less than $30,500 for individuals, $45,750 for heads of household and $61,000 for couples in 2015 are eligible for the saver's credit. This tax credit is worth between 10 and 50 percent of the amount you contribute to an IRA up to up to $2,000 for individuals and $4,000 for couples. A couple earning $30,000 who saved $2,000 in an IRA could receive a $1,000 credit, in addition to the tax deduction for the contribution.

Don't wait until the last minute. While contributions postmarked by the tax deadline are eligible to be counted as 2015 deductions, it's a good idea to contribute a few days or weeks in advance to allow for processing time or to correct mistakes. And, of course, contributing early gets the money compounding on your behalf sooner. "The whole idea behind an IRA is to have tax-deferred growth of your money," says Austin Chinn, a certified financial planner for Fountain Strategies in San Jose, California. "The sooner you put it in the longer it has to grow."

Emily Brandon U.S. News & World Report

Call me to schedule an appointment so I can help you file your taxes! 619-497-1040

01/12/2016

Tax season is here and the pressure is beginning to pile on.
Here are some quick tips for those tallying up their business miles:

•2015 Standard Mileage Rate: The IRS declared $0.575 the standard mileage rate for business in 2015. This is up 3% from $0.56 in 2014.

•Records! Records! Records! : Always keep a mileage log to record every business mile driven. There are several smartphone apps (Mileage Log+, MileIQ, etc.) that streamline this task.

•Limitations: Remember, there are limitations to the rate’s usage. Some examples:
o-Deductible – Driving from your office to a second office or business (having two jobs).
o-Not Deductible – Driving from your house to your office.
o-Deductible – Driving from the office supply to store to your place of business.
o-Not Deductible – Driving to the hobby store after work for non-business supplies.

More tax tips to follow later this week!

Need help preparing your taxes? Call me at 619-497-1040

01/12/2016

Uber Drivers (or former Uber Drivers)!

California has ruled that you're an employee and NOT an Independent Contractor. So now, how do you deal with tax filing? In the past as an Independent Contractor you filled out Schedule C and took all the deductions you were entitled to (and more :) ) Now, as an Employee you'll need to complete Form 2106.

Call my Office and schedule an appointment for me to help you with your taxes. I'm here to help you! 619-497-1040